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| Check your rates using my Free Pricing Calculator | Check your rates using my Free Pricing Calculator| Check your rates using my Free Pricing Calculator | Check your rates using my Free Pricing Calculator

Time to raise those rates

Time to raise those rates

Your pay rise; how to do it without losing clients (and your breakfast)

Your pay rise; how to do it without losing clients (and your breakfast)

If you struggle to put a dollar amount on your time, click here to grab my Free Pricing Calculator here and run your numbers for yourself.

It’s the best way to work out your unique recipe for your prices.

Let me guess, the thought of raising your rates makes your stomach flip-flop and your vision go blurry. You avoid it like it’s boiled liver, mostly because you’re simply not sure on the right way to get it done. Add on the idea that your current clients might go elsewhere if your rates increase and…… I’ll go get the paper bag now. 

The thing is, a pay increase should be regularly on the cards for all working humans, not just those who are employed. In the very least, inflation isn’t going to….. deflate. That means that if you’re not growing, you’re shrinking.

Prior to Covid, inflation was around 2% per year…

Now (thanks to the spicy flu), it’s sitting closer to 5%. If you are not increasing your rates by at least 5% each year, you’re losing money. The dollars you earn won’t keep stretching the same way, and eventually you’ll be wondering why you never seem to have enough money.

I know what you’re thinking. Raising your prices is hard. It probably took 7 mud cakes and a casket of cheap wine for you to even land on the prices you charge now. While I’ll never judge someone for eating cake and getting tipsy, you’ve got a secret weapon this time that you didn’t have before:

Me.

Bold, I know, but hear me out…

Let’s first understand why you need to raise your rates. Inflation is certainly a factor, but let’s take a moment to provide you with the justification you’re seeking. 

It’s not about being greedy.

Your skills and abilities have almost certainly grown since the last time you decided on your rates. The ‘you’ who existed back then doesn’t have the expertise that you do now, and you’ve more than earned yourself a promotion.

This isn’t about greed. It’s about receiving an appropriate level of compensation for the value you provide your clients.

Rate increases are just part of good business.

There are only two ways to make more money in business; earn more or spend less. While it’s definitely worthwhile to regularly check-in with your accountant/bookkeeper about your spending, the reality is that it costs money to run a business. That, really, leaves you needing to earn more.

All businesses increase their prices, and regularly. A loaf of bread used to cost one third of what it does now. If prices don’t increase, businesses don’t survive.

Your clients actually expect it (and even appreciate it).

As crazy as this may sound, it’s true. Consumers are used to paying more for things than they used to. In fact, raising your rates in the right way can actually help build trust. It shows that you are improving, evolving, and are even better equipped to solve their problems than you once were.

If your prices stay the same and your competitors increase theirs, your clients may question the quality of what you offer. Most of us understand that a higher price usually means higher quality. If you want to attract clients who are looking for quality over price, make sure your rates reflect that.

You’ll be more invested in improving.

One of the drawbacks to being self-employed, is that there’s nobody above you to crack the whip. The motivation to actively grow and improve has to come from within. When you raise your rates, it almost gives you a jolt of inspiration.

Suddenly you’re aware that by charging more, your clients may be expecting more. You’ll be more likely to upgrade your tools and systems, widen your skillset, and improve the quality of your offerings overall.

Take my free 5 Day Raise Your Rate Challenge and I’ll have your rates raised by this time next week

When you’re a freelancer, you simply won’t grow if you don’t charge more. With that in mind, here are the steps I use to give myself a pay increase.

Be clear on where you are (and where you’ve been).

The first step in raising your rates is knowing exactly what you charge now, and how you formulate those numbers. Are you working solely off an hourly rate? A price per project? Do you offer retainers and if so, how do you decide on their prices? If it’s time to raise your rates, this information needs to be at the forefront of your mind. Understand exactly what your current prices are, and why.

Work out which business expenses have increased (and by how much).

In business, it really pays to keep an eye on your outgoing costs. It’s so easy to ignore the ‘your subscription is about to become more expensive’ emails, and not take a second glance at your direct debits.

As mentioned earlier, successful businesses increase their prices regularly. This means that you’ll be paying more for things than you once were. Consider which essential expenses have increased, and by how much. This can be anything from your digital subscriptions to your materials, tools, and studio rent.

Hot Tip, if you want help doing this, head over to this blog to pinch my Cut The Fat Expenses Worksheet!
Give your current clients plenty of notice.

Many freelancers worry that increasing their rates will send their current clients running into the arms of the competition. While this has not been my experience, it is important that you notify your clients in the right way. In the very least, provide plenty of notice. Months, if possible. Start your new pricing on an easy-to-remember timeline, like the first day of a new month or the beginning of a new financial year. Provide enough communication that nobody could, justifiably, feel blindsided by the increase.

In the unlikely event that someone does complain, you need to be able to show ample evidence that they were notified. You can even use the lead-up period as an incentive for clients to book sooner rather than later. Highlight that if they book/pay/whatever by a particular date, you’ll honour your current pricing. Use this to your advantage!

Remember that new clients don’t know any different.

It’s only your regular clients who will know that you’ve raised your rates. While they may account for a portion of your income, they likely won’t account for all of it. New clients won’t know that you used to be cheaper. They’ll just accept that these are your rates, and possibly even appreciate why you might be more expensive than your competitors. Remember, you don’t want to be hired because you’re the cheapest.

Revise your pricing method.

If you’re still charging only by the hour, it may be time to consider a new method of pricing. Project pricing can serve you in a multitude of ways (and you can read more about those here), but in the very least, it makes price increases easier to swallow. It’s harder for your clients to compare your new rates with your old when you’re charging per project instead of per hour. Project pricing also eliminates the potential for bill shock because the client knows, up front, exactly what they’ll be paying.

Even though you don’t need to be worried, I know you’re probably still panicking about the thought of notifying your clients of an impending price increase. Let me help you with the following email template:

Hey *insert name*,

This is just a quick email to, first of all, let you know how much I value you. Being paid to do what you love isn’t an opportunity that’s available to everyone. I’m truly grateful to be one of the lucky few.

Secondly, I just wanted to notify you of some upcoming pricing changes. As I’m sure you’re aware, successful businesses can’t keep their prices the same forever or they won’t be successful for long. If we factor in inflation, as well as my continued commitment to provide only the highest quality services, my current prices can’t serve me for much longer.

As of *insert date*, my new prices will take effect. Please don’t hesitate to ask for new proposals or quotes as needed.

In the interim, I am happy to honour my current rates. If you need me sooner rather than later, get in touch now to make the most of my current prices.

If you have any questions, I’m always just an email or phone call away.

Thanks for your continued support,

Steve

Raising your rates doesn’t have to be something daunting. In fact, it’s a milestone worth celebrating.

Make 2023 the year you get a pay rise.

(You really can have your cake and eat it too).

Good advice is like a delicious pie, it deserves to be shared with others...

Need help raising your rates?

Join my Free 5 Day Raise your Rates Challenge and you’ll be charging more before this time next week.

And knowing WHY so you can communicate it to your clients!

Still hungry? Check these dishes out…